Municipal Bond Forum
New bond issues
Q
I am unable to determine how I can purchase municipal bonds during the “initial offering period” when the purchase fees are paid to the initial seller. It appears that the brokers are now buying up the bonds for their own accounts and then selling them back to their clients at an additional fee. I consider this double dipping and taking unfair advantage of their clients! How do I prevent this? What system and procedure is necessary?
A
James A. Klotz responds:
Your broker should be willing to take your order for a new bond issue if his firm is involved in the underwriting syndicate. If your order is submitted during the “order period” and the bonds are available, you will receive your bonds at the original terms. If it is a “hot issue” and the order period is “oversubscribed,” larger orders will take precedence and your order may not be filled.
Start here.
Do you have specific criteria for bonds you’re looking for? Let us know and we’ll e-mail you bonds that fit your needs. There is no charge for this service.
This report is produced solely for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. This report is based on information obtained from sources believed to be reliable but no independent verification has been made, nor is its accuracy or completeness guaranteed.